The November 27 Senate hearing on the activities of the Federal Trade Commission (FTC) highlighted the shortcomings of applying industrial-era thinking to internet-era challenges. It is a situation exacerbated by the Trump Administration’s bias of companies over consumers. The new digital reality calls for both expansive regulatory oversight as well as legislative action.

In response to a question posed by a bearded Sen. Ted Cruz (R-TX), FTC Chairman Joseph Simons described the limits of his agency’s authority: “unless it is something that relates to a competition issue, or it’s unfair or deceptive, then I don’t think we have a role.” No role? On the contrary, as Big Tech creates new challenges to consumer protection and marketplace competition, the FTC should re-examine its role in terms of internet realities rather than clinging to industrial precedents.

Interestingly, the question to which the chairman was responding was Sen. Cruz’s complaint that social media was discriminating against conservative opinion. Rightfully, Chairman Simons pushed back against using regulation to referee the First Amendment. However, his constrained description of the FTC’s authority highlights the need for creative new responses the the ongoing collision between conservative dogma and the unconstrained activities of Big Tech.

Competition and Consumer Protection Intertwined

Once upon a time, the oversight of competition and the oversight of unfair or deceptive practices were distinct areas of the law: witness today’s separate FTC Bureaus of Competition and Consumer Protection. However, the unconstrained exploitation of digital technologies in recent years has welded the two legal concepts together. The unfair deception of consumers has enabled a noncompetitive industry structure which exploits consumers in turn.

Digital technology has intertwined the competition and deception issues to create new threats that require new thinking about statutory applications. Thus far, excessive faith in free market outcomes and lenient consumer protection enforcement has been exacerbated by the rapid expansion of previously unimagined digital capabilities. For instance, tech companies hiding behind “privacy policies” deceive consumers into thinking that they are protected when the policies actually grant permission to violate their privacy. Having accomplished that harm, such practices provide tech companies with a hoard of aggregated consumer information that thwarts competition in sending targeted information to consumers.

The FTC is typically regarded as the agency of government most qualified to deal with the broad challenges of the internet economy. While the Federal Communications Commission’s (FCC) jurisdiction is limited to the nation’s internet delivery networks (which the Trump FCC has declined to use, claiming the FTC is sufficient), the FTC has jurisdiction over the vast majority of the internet economy.

As defined by its Chairman, the agency seems to view its authority through one-way glass. From its perch on Pennsylvania Avenue, the agency looks outward saying “our powers are limited,” instead of standing outside and asking “what does the new reality out here mean for what we can do?” It is a conservative lawyer’s view of the allegedly unrelated buckets of competition and deception rather than an advocate’s view of competition and consumer protection, asking what to do about how new digital activities have joined the two together. Our new times demand the expansive exercise of authority to tackle new problems.

Looking forward

For the next several years we will witness this debate play out in Congress. The companies that deliver the internet, such as Comcast and AT&T, along with the companies riding that delivery pathway, such as Facebook and Google, will argue how regulation risks breaking the magic of the internet. Those that speak on behalf of consumers and competition will argue that only government has the power to challenge the economic muscle of the tech giants.

If past is prologue, this debate will continue well past the 2020 elections. Chairman Simons’ testimony about the need for expanded authority and resources sets a litmus test for the Congress. However, the split leadership of the houses of Congress, the anti-regulation bias of the Trump Administration, and the incentive for companies to delay change as long as possible will fill the calendar with debate instead of decision.

The litmus test for Congress should also apply to the FTC itself. A forward-looking FTC could advance this debate by recognizing the convergence of unfair acts with uncompetitive behavior. Shedding its industrial interpretations could provide some short-term amelioration of current issues. Most importantly, it could draw a roadmap laying out the areas that need new legal authority. Protecting consumers and competition in the digital age requires conforming responsibilities established in the industrial era with the new realities established by information technology. The FTC needs to be as innovative in oversight as the companies are in technology.

Comcast, AT&T, Facebook, and Google are donors to the Brookings Institution. The findings, interpretations, and conclusions posted in this piece are solely those of the author and not influenced by any donation.

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By Tom Wheeler
The November 27 Senate hearing on the activities of the Federal Trade Commission (FTC) highlighted the shortcomings of applying industrial-era thinking to internet-era challenges. It is a situation exacerbated by the Trump Administration’s bias of companies over consumers. The new digital reality calls for both expansive regulatory oversight as well as legislative action.
In response to a question posed by a bearded Sen. Ted Cruz (R-TX), FTC Chairman Joseph Simons described the limits of his agency’s authority: “unless it is something that relates to a competition issue, or it’s unfair or deceptive, then I don’t think we have a role.” No role? On the contrary, as Big Tech creates new challenges to consumer protection and marketplace competition, the FTC should re-examine its role in terms of internet realities rather than clinging to industrial precedents.
Interestingly, the question to which the chairman was responding was Sen. Cruz’s complaint that social media was discriminating against conservative opinion. Rightfully, Chairman Simons pushed back against using regulation to referee the First Amendment. However, his constrained description of the FTC’s authority highlights the need for creative new responses the the ongoing collision between conservative dogma and the unconstrained activities of Big Tech.
Competition and Consumer Protection Intertwined
Once upon a time, the oversight of competition and the oversight of unfair or deceptive practices were distinct areas of the law: witness today’s separate FTC Bureaus of Competition and Consumer Protection. However, the unconstrained exploitation of digital technologies in recent years has welded the two legal concepts together. The unfair deception of consumers has enabled a noncompetitive industry structure which exploits consumers in turn.
Digital technology has intertwined the competition and deception issues to create new threats that require new thinking about statutory applications. Thus far, excessive faith in free market outcomes and lenient consumer protection enforcement has been exacerbated by the rapid expansion of previously unimagined digital capabilities. For instance, tech companies hiding behind “privacy policies” deceive consumers into thinking that they are protected when the policies actually grant permission to violate their privacy. Having accomplished that harm, such practices provide tech companies with a hoard of aggregated consumer information that thwarts competition in sending targeted information to consumers.
The FTC is typically regarded as the agency of government most qualified to deal with the broad challenges of the internet economy. While the Federal Communications Commission’s (FCC) jurisdiction is limited to the nation’s internet delivery networks (which the Trump FCC has declined to use, claiming the FTC is sufficient), the FTC has jurisdiction over the vast majority of the internet economy.
As defined by its Chairman, the agency seems to view its authority through one-way glass. From its perch on Pennsylvania Avenue, the agency looks outward saying “our powers are limited,” instead of standing outside and asking “what does the new reality out here mean for what we can do?” It is a conservative lawyer’s view of the allegedly unrelated buckets of competition and deception rather than an advocate’s view of competition and consumer protection, asking what to do about how new digital activities have joined the two together. Our new times demand the expansive exercise of authority to tackle new problems.
Looking forward
For the next several years we will witness this debate play out in Congress. The companies that deliver the internet, such as Comcast and AT&T, along with the companies riding that delivery pathway, such as Facebook and Google, will argue how regulation risks ... By Tom Wheeler
The November 27 Senate hearing on the activities of the Federal Trade Commission (FTC) highlighted the shortcomings of applying industrial-era thinking to internet-era challenges. It is a situation exacerbated by the Trump ... https://www.brookings.edu/research/who-makes-the-rules-in-the-new-gilded-age/Who makes the rules in the new Gilded Age?http://webfeeds.brookings.edu/~/585032460/0/brookingsrss/topics/balkans~Who-makes-the-rules-in-the-new-Gilded-Age/
Wed, 12 Dec 2018 05:30:14 +0000https://www.brookings.edu/?post_type=research&p=552116

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By Tom Wheeler

Introduction

At a summit of international business leaders recently, I was surprised how often the discussions turned to the impact of the internet on liberal democratic values, including capitalism. Populism, nationalism, protectionism, Brexit, Trump, the rise of the alt-right, the call for socialism, and the seeming success of government-managed markets were all attributed—at least in part—to how the internet has eliminated many of the rules that delivered stability for the last century.

A “liberal democracy” does not apply the word “liberal” as we do in American politics. A liberal democracy is a representative democracy of free and fair elections, and the rule of law applied to equally protect all persons. Until recently, it has been on the rise throughout the world. Democratic capitalism is a free market operating within guardrails established by such a liberal democracy.

What I was hearing from the business leaders was that new technology and the internet create an economic and social instability that plays into the hands of those at the extremes—extremes of both political thought and marketplace dominance.

At the political level, the digital engine that is driving economic and social instability also provides the tools to exploit the resulting dissatisfaction so as to threaten liberal democratic capitalism. Populism from the right can tend toward authoritarianism, while populism from the left can tend toward socialism. In the marketplace, technology has delivered a different type of extremism: a handful of companies with unfettered dominance over key components of economic activity. The internet, a decentralized collection of interconnecting networks, has created new centralized powers that siphon, aggregate, and manipulate personal information to create bottlenecks to the operation of free and open competition.

Populism from the right can tend toward authoritarianism, while populism from the left can tend toward socialism. In the marketplace, technology has delivered a different type of extremism: a handful of companies with unfettered dominance over key components of economic activity.

The internet started out with the hope of being the great democratizer by removing barriers to everything from the flow of news to local taxi service. While the networks of history had centralized economic activity, the distributed architecture of the internet would similarly distribute power away from central institutions. Unfortunately, that has not been the result. Companies utilize the distributed network to recentralize activity. Corporate digital autocrats collect personal information and exploit it to control markets. Political digital autocrats use the internet to spy on their citizens and target attacks on the democratic process.

I. Technology has done this before

That the effects of new technology cause such upheaval should not surprise us. Technological change previously caused similar—if not greater—destabilization; both economic and political. The technology-driven upheavals of the late 19th and early 20th centuries shaped the world from which our new technology is departing. The challenges of that time echo in the reality that confronts us today.

That the effects of new technology cause such upheaval should not surprise us. Technological change previously caused similar—if not greater—destabilization; both economic and political.

A couple of decades after the Civil War, the United States entered an era dubbed “The Gilded Age.” It was Samuel Clemens—Mark Twain—who gave us the term. In an 1873 novel, co-written with his friend Charles Dudley Warner, the duo satirized the economic excesses, personal greed and political corruption of the time. The novel’s title, “The Gilded Age: A Tale of Today,” was an inspired choice of words.

In Twain’s telling, the era wasn’t a “golden” age—something pure and solid like a bar of gold—rather is was a “gilded” age. To “gild” is to cover something of lesser value with a coat of gold to make it look like what it is not. In Twain’s telling, the era was one in which such a superficial covering disguised a more base reality.

The Gilded Age was a time in which technological innovation drove wonderful new industrial products that improved individual lives, while at the same time creating great wealth and accompanying economic inequality. It was a period of market dominating companies and citizen and journalistic revolts against their control. It was also a period marked by claims of “fake news” and by the election of two presidents who failed to win the popular vote. (Hayes in 1876 and Harrison in 1888.)

The similarities between this era and today bring forth another great Twain observation: “History doesn’t repeat itself, but it often rhymes.” Today we live in the new Gilded Age: technology-driven innovations have again improved daily life while creating great wealth, inequality of circumstances, non-competitive markets, and viral deceit.

There is one more similarity between today and the original Gilded Age. Back then, the rules that governed the application of the new technology were made by a handful of industrial barons for their own benefit. The rules in the early internet era—the new Gilded Age—are being made similarly; this time by information barons.

The unbridled nature of the original Gilded Age eventually went too far. The result was a popular uprising and the representatives of the people stepping in to create a set of rules to serve the broad public interest over narrow private interests. We find ourselves at a similar crossroads today. Whether and how we step up to that responsibility is the challenge of our era … and of each of us.

Good policy is grounded in an understanding of history. We forget that liberal democratic capitalism succeeded because acting collectively, Americans caused their democratic institutions to protect consumers, workers, and the competitive marketplace. We forget that liberal democratic capitalism had to do battle against those who saw communism, socialism, or fascism as a better alternative. We forget that liberal democratic capitalism was preserved through the establishment of rules that inhibited its natural excesses.

In the industrial era, we discovered that the rules established for a mercantile-agrarian economy were no longer up to the task. Industrial scope, scale, and speed necessitated the establishment of guardrails to keep industrial capitalism on the right path. As we look at the new realities of the internet age, we need similar guardrails that will allow information capitalism to similarly succeed.

It is “an old pattern in American economic history,” historian John Steele Gordon explained, “Whenever a major new force—whether a product, technology, or organizational form—enters the economic arena, two things happen. First, enormous fortunes are created by entrepreneurs who successfully exploit the new, largely unregulated niches that have opened up. Second, the effects of the new force run up against the public interest and the rights of others.”1

New technology opens new niches for which there are no rules because the niche never before existed. Those who saw the niches and determined how to open them deserve to be rewarded. But when the exploitation of those niches collides with the common good, then the people have the right to insist on rules to protect the broader public interest.

Thus, it is appropriate to ask the question, “Who makes the rules in the new Gilded Age?” Who is it that stands up for the public interest and the rights of others?

At the time of the original Gilded Age, it was the industrial barons who made the rules. That is, until the people’s representatives stepped up to do their jobs. Today, in the new Gilded Age, it is the internet barons who make the rules. Unfortunately, the parallel ends there. Neither the Republican-led Congress, nor the Trump Administration has stepped up to their responsibility to establish new rules for our new time.

II. Listening to TR

So, let’s step back in time for a moment, into that earlier Gilded Age. Specifically, let’s go to the morning of March 4, 1905 in the nation’s capital. As is typical for the early spring in Washington, the day saw a struggle between snow and daffodils. It had snowed the day before; but on this day, under a bright 45-degree sun, the president of the United States stood before the Capitol to take the Oath of Office. Theodore Roosevelt, who had become the surprise president upon the death of William McKinley four years earlier, was now the duly elected chief executive of a country at the height of the Gilded Age.

Roosevelt addressed the dichotomy of economic expansion and the abuse of the power that had accumulated to a few as a result. While the industrial economy had produced “marvelous material well-being,” he said, it also generated “care and anxiety” that were “inseparable from the accumulation of great wealth.”2

Speaking for the average citizen buffeted by technology-driven, market-concentrating change, Roosevelt observed, “Modern life is both complex and intense, and the tremendous changes wrought by the extraordinary industrial development of the last half century are felt in every fiber of our political and social being.”

It is a message that could have been delivered today.

Roosevelt concluded with a message that should be delivered today. It was time for the nation to “approach these problems with unbending, unflinching purpose to solve them aright.”

The economic powerhouses of which Roosevelt spoke were of two types: those that built the networks that connected the nation, and those that used the networks. The economic powerhouses of the digital era have the same construction: dominant providers of internet access and the dominant digital platforms that ride on them.

Railroads were the first high-speed network. By transporting raw materials to a central point for factory-based conversion into products, the railroad enabled the industrial revolution—just as high-speed internet connections have enabled the information revolution. In an observation as applicable now as it was then, one historian wrote, “Being run by human beings, the railroads, naturally, did not hesitate to exercise their market power to their own advantage.”3

The railroads then enabled new economic giants, just as the internet has. When Gustavus Swift developed the refrigerated railroad car in 1878, his company did to local butchers what Google would do to the local advertising business over a century later. Slaughtering at scale in Chicago abattoirs was significantly less expensive than one-off local butchers doing the same thing. Add to this the savings from transporting only the edible cuts of beef rather than the whole cow, and Swift redefined the American dinner plate while destroying a cornerstone of local economic activity.

Today’s economic activity is built on digital code. Digital information is the most important capital asset of the 21st century. Typically, Gilded Age assets were hard assets: industrial products that ended up being sold. Today’s economy runs on the soft assets of computer algorithms that crunch vast amounts of data to produce as their product a new piece of information. The business of networks like Comcast, AT&T, and Verizon, and of platform service providers like Google, Facebook, and Amazon is not just connections or services, but the digital information about each of us that is collected by those activities and subsequently reused to target us with specific messages.

Roosevelt’s explanation that the innovative use of new technology is “inseparable from the accumulation of great wealth” has also proven true in the new Gilded Age. A 2015 study concluded, “Only the ‘Gilded Age’ at the beginning of the 20th century bears any comparison” to the extraordinary wealth creation of the last 35 years.4 At the height of the first Gilded Age, the top decile commanded more than 45 percent of the gross income in the United States. Today, the top decile of earners commands more than 50 percent of income.5

At the height of the first Gilded Age, the top decile commanded more than 45 percent of the gross income in the United States. Today, the top decile of earners commands more than 50 percent of income.

This is not a condemnation of the entrepreneurs who built the digital economy. The risk-taking and the vision necessary for innovation deserves to be rewarded. It is, however, a commentary that trickle-down economics has failed to share those rewards with the rest of the population.

The former CEO of Sears, Arthur Martinez, has explained that only a few decades ago, “the people who produced or sold the product were more central than the people in the corporate suite.” At Sears—a powerhouse in its day like Amazon is today—the company’s profit sharing subsidized employee stock purchases. This meant, according to The New York Times, that 50 years ago, a typical Sears salesman, “could walk out of the store at retirement with a nest egg [of Sears stock] worth well over a million dollars in today’s dollars.” “If Amazon’s 575,000 total employees owned the same proportion of their employer’s stock as the Sears workers did in the 1950s, they would each own shares worth $381,000,” the Times calculated.6

Teddy Roosevelt echoes again: “There can be no real political democracy unless there is something approaching economic democracy,” he warned.7

Which leads us to a foundational question. Amidst all the industrial upheaval, non-competitive markets, and economic inequality of the Gilded Age, government did little to address the root issues. Today is even worse. Government began to address the issues of new technology’s impact during the Obama Administration. As Chairman of the Federal Communications Commission (FCC), I played a role in some of those activities. However, the rules we established—for example, to protect personal privacy and guarantee open access to the internet—the Trump Administration and Republican-led congress quickly repealed.

One must ask—of today and of the original Gilded Age—why did leaders ignore the obvious need for rules to provide stability and certainty?

In “Age of Betrayal,” a comprehensive analysis of the Gilded Age, author Jack Beatty reflected on this question. “A student of the Gilded Age confronts a mystery,” he wrote, “What reverse alchemy transformed mass enthusiasm [built around specific political issues] into policies disfavoring the masses?” The answer, he concluded, was the “politics of distraction.”8

In the Gilded Age, “The parties exploited sectional, racial, cultural, and religious cleavages to win office,” Beatty judged. “Then [they] turned government over to the corporations.” The mandate of the people was achieved by focusing on single issues designed to arouse a target base. Once in power, however, the people’s mandate was not used to protect the people who granted the power in the first place.

In the new Gilded Age, the politics of distraction is aided and abetted by the ability of digital networks and algorithms to target the distracting messages.

Today, we hear some of Twain’s historical rhymes. In the new Gilded Age, the politics of distraction is aided and abetted by the ability of digital networks and algorithms to target the distracting messages. It is perverse that what the digital companies call building a “community” actually enables the opposite: to divide communities into tribes that are then organized to maximize distraction from what is not being done.

III. “Unending, unflinching purpose”

If we are to import TR’s challenge to “approach these problems with unbending, unflinching purpose to solve them aright,” what should be done?

Once again, let us turn to Mr. Roosevelt.

Only a few weeks before his inaugural remarks, Roosevelt opened his campaign for meaningful railroad regulation with a speech at the Union League Club of Philadelphia. While his focus may have been on the networks, his observations are of general applicability:

Neither the people nor any other free people will permanently tolerate the use of the vast power conferred by vast wealth, and especially by wealth in its corporate form, without lodging somewhere in the government the still higher power of seeing that this power, in addition to being used in the interest of the individual or individuals possessing it, is also used for and not against the interests of the people as a whole.

Today, just like a century earlier, the first step in rebalancing between the people and the powerful begins with oversight of the dominant network. This time that network is the one that provides internet connections to homes and offices. The struggle over what has become known as “net neutrality” has at its core the very issue TR identified in Philadelphia: the necessity to “keep the great highways of commerce open alike to all in reasonable and equitable terms.”9

Today, the “great highways of commerce” are the wired and wireless networks that deliver high-speed connections to the internet. Since the early days of this century, a debate has raged over the nature of public oversight of these new digital pathways. Both Republican and Democratic FCCs proposed oversight policies—and the companies fought them all. Every time the FCC would put a policy in place, a network would file suit to block it. The networks won most of those challenges.

In February 2015, I asked the FCC to vote on an Open Internet Rule declaring that those providing internet access to homes and offices were common carriers that must provide nondiscriminatory access to their network. By a contentious 3-2 party-line vote, the proposal was adopted. Most importantly, when the networks’ inevitable court challenge followed, the same court that had struck down an earlier decision upheld our decision—twice.

For the following almost three years, the Open Internet Rule proved that the internet, the most crucial tool for innovation, creativity and access in over a century, could remain free and unencumbered for the people who need it most—while allowing network companies to flourish.

When Congress passed the railroad regulation bill in 1905, the railroads launched what Doris Kearns Goodwin described as, “a sweeping propaganda campaign to turn the country against regulation.”10 The network giants of the time argued that, “disaster would follow if the government ‘should meddle’ in the complex business of network decisions.” They further asserted, “The laws already on the books were sufficient to deal with any difficulties.”11

The same arguments were dusted off and replayed during debate on the Open Internet Rule. The networks’ lobbying propaganda found a receptive regulator after the surprising result of the 2016 presidential election. At the urging of the industry, Donald Trump named as the new FCC Chairman the Commission’s most vocal opponent of the Open Internet Rule. Within days, the new Republican FCC began walking away from Republican Theodore Roosevelt’s vision of a “still higher power” acting in behalf of the people.

Pre-Roosevelt, efforts at railroad regulation “were little more than political cover for allowing railroads to do as they pleased,” John Steele Gordon observed.12 The Trump FCC followed the same pattern with regard to the essential network of the 21st century by repealing the Open Internet Rule. Then, the FCC reprised the 1905 railroad propaganda by claiming that, “The laws on the books were sufficient to deal with any difficulties.” More than simply repealing the existing Open Internet Rule, the FCC—the federal agency created to oversee the public interest obligations of essential electronic networks—walked away from its responsibility, claiming it had no authority, and asserting the Federal Trade Commission (FTC) could act if anything untoward were to happen.

The Trump FCC’s action was the culmination of the internet providers’ grand plan. In 2013, The Washington Post had reported, “Here’s how the telecom industry plans to defang their regulators.”13 That article explained, “telecom giants including Verizon, AT&T, and Comcast have launched multiple efforts to shift regulation of their broadband business to other agencies that don’t have nearly as much power as the FCC.”

On December 14, 2017, the Trump FCC fulfilled the network’s lobbying goal. By a 3-2 party-line vote, the Commission threw out the Open Internet Rule. In keeping with the networks’ strategy, the FCC also announced it would no longer be responsible for oversight of the most important network of the 21st century.

The first answer to the question “Who makes the rules in the new Gilded Age?” was answered—at least insofar as the networks were concerned.

IV. Rules for those who ride the networks

One of the other arguments made by the networks as to why they should not be regulated was that it “wasn’t fair” that they should exist under public interest rules while the companies that use the network—service platforms like Google and Facebook—were making huge profits because they had no such rules. That is because Google,14 Facebook, et al do not provide internet access services, so oversight of their activities falls to the general responsibility of the Federal Trade Commission over unfair or deceptive acts or practices in the marketplace.

While the FTC has brought after-the-fact adjudicatory action against the platform companies for deceptive practices—principally, not telling consumers about their collection of private information—the agency has heretofore determined it lacks statutory authority to dictate broad going-forward rules. The FTC can typically act only after harm has been done and the horse is out of the barn. This has left the people who run the platform companies free to make their own rules.

Such self-directed rule-making especially impacted two issues: the privacy of the personal information of each of us, and the disappearance of a competitive market for digital services.

The rights of individuals regarding their personal information is rapidly becoming a 21st-century civil rights issue. We have emerged into an era where the technology to collect and aggregate personal information has sped past the law.

The rights of individuals regarding their personal information is rapidly becoming a 21st-century civil rights issue.

Consumers know they have lost control of their personal information. A 2017 survey found 70 percent of Americans lacked confidence that their personal data is private and safe from distribution without their knowledge.15

Returning to citizens the control of their information has been embraced by both the left and right of the political spectrum. Alt-right political strategist Steve Bannon describes it as the recovery of each individual’s “digital sovereignty.” He cites it as one of the three principles that will drive a forthcoming populist rage.16 The political left has adopted a similar theme, calling it “digital feudalism.” In Medieval times, feudal lords confiscated the output of the serfs—their labor; today, digital lords confiscate the output of citizens—their information.

There can be no doubt about the wondrous new capabilities that have been made possible using digital information. From ordering a pizza, to conducting medical research without test tubes and lab rats, we are significantly better off because of the data-based innovations the internet has made possible. While applauding the success delivered by the innovative use of personal data, however, we cannot be blind to how the rules are being made by those with the incentive to first look out for their business interests.

One of the company-made rules is to lock away behind digital walls the vast trove of information they gather about each of us. This practice allows the company to leverage your personal information to create a dominant anti-competitive position in the marketplace.

The more information a company has, the more precise its targeting can be, the harder for a competitor to gain a foothold, and the more that can be charged. Thus, the companies developed practices that allowed them to not only maximize information collection, but also to deny its access to others.

The same platform companies that championed the Open Internet Rule so the networks could not create a bottleneck that could shut them out, oppose applying similar openness rules to the data they have siphoned from consumers and locked away to create their own bottleneck.

The early developers designed the internet to be an open network. After creating the internet, the open development process continued for the network’s technical standards but fell apart for the commercial operation of those that use it. The very same companies that found in the open standard the niche of opportunity, walked away from that openness in order to create their own rules built around locking everything behind the high walls of discrimination.

Under classic economic theory, the low costs and high profits enjoyed by internet platforms should attract competitors, and that competition should protect consumers and market viability. The way the companies have written the rules, however, allows them to hoard the digital information siphoned from consumers and use that hoard any way they wish—including as a tool to keep out competitors.

The nondiscriminatory openness that created the world’s most important network thus falls prey to gatekeepers whose business plan relies on siphoning personal information, aggregating great quantities of it to enhance targeting, and then denying access to those assets in order to discriminate. Because they can make their own rules, the platform services that today rely on the internet to collect personal information and deliver services have reconstructed the kind of walled gardens the technology of the internet was designed to abolish.

This is the second answer to “Who makes the rules in the new Gilded Age?”

V. Need for new rules

The digital companies are not bad actors—they have just been given free rein over their behavior and have taken advantage of that lack of oversight. They have acted in accord with human nature and economic self-interest. Nobody expects them to act like the Red Cross.

The digital companies are not bad actors—they have just been given free rein over their behavior and have taken advantage of that lack of oversight.

We have seen actors on a stage like this before. We know that in that play, the establishment of rules helped preserve industrial capitalism. The protection and preservation of internet capitalism calls out for a similar script.

Once again, we turn to Theodore Roosevelt for insight and inspiration. At that meeting in Philadelphia, only a few weeks before his inauguration, he spoke about the same topic we are discussing today. “The great development of industrialism,” he said, “means that there must be an increase in the supervision exercised by the government over business enterprises.” Then he appealed to American business to work with him. “This supervision should not take the form of violent and ill-advised interference,” he pledged. But, then he cautioned, “assuredly there is danger lest it take such form if the business leaders of the business community confine themselves to trying to thwart the effort at regulation instead of guiding it aright.”

That was a pretty clear message, but Roosevelt continued, saying that the responsible business leaders of America should…

…[L]ead in the effort to secure proper supervision and regulation of corporate activity by the government, not only because it is for the interest of the community as a whole that there should be this supervision and regulation, but because in the long run it will be in the interest above all of the very people who often betray alarm and anger when the proposition is first made.

The corporate leaders ignored that advice. What followed this speech was a vigorous and hard-fought debate over the rules for industrial capitalism. We should not delude ourselves that our challenge will be any easier or less arduous.

Interestingly, however, the kind of meaningful rules that should govern the most powerful and pervasive platform in the history of the planet17 are actually hundreds of years old. They are embedded in the principles of common law. Such principles are simply that companies have responsibilities: a “duty of care” not to cause harm, and a “duty to deal” to ameliorate the consequences of monopoly bottlenecks. Such concepts were at the heart of industrial era regulation. In today’s world of internet-driven change, these principles remain unchanged.

The harvesting of personal information—often without the individual’s knowledge—infringes on the sovereignty of the individual and their personal privacy. Just as the government established rules post-Gilded Age to protect the collective good by assuring pure food and drugs and clean air and water, we now have a collective interest in overseeing how the internet allows companies to collect and exploit personal information. Internet companies—both service platforms and the networks that deliver them—should have a “duty of care” as to the effects of their actions on personal privacy.

The companies and the FTC have focused on what is called “transparency”—the disclosure of what the companies are doing to collect and use your information. This is accomplished by the so-called “privacy policies” of each company. In Orwellian doublespeak, these “privacy policies” are made to sound as though they are protecting privacy, but they are actually about gaining permission to violate your privacy. Far from protection, they are extortion; a list of privacy taking permissions the companies want you to agree to in order to receive their service.

At a standard reading rate, it would take 76 eight-hour days—almost four months—to read the policies of the websites visited by the average American.

Each company makes the rules they develop easily available. The companies argue this fully informs the consumer. Here, however, is where the rubber of “make your own rules” transparency meets the road. According to a Carnegie-Mellon study, the median length of such policies for the top 75 websites is 2,514 words. At a standard reading rate, it would take 76 eight-hour days—almost four months—to read the policies of the websites visited by the average American.18 Even more important, because these rules are unilaterally made by the companies, they can be—and are—changed whenever the company wants. All the companies have to do is tell you they’ve unilaterally changed the rules, and the charade begins anew.

Certainly, transparency is better than no transparency. But it is not a singular solution to protecting the privacy of Americans. Too often, it is nothing more than air cover for internet companies making the rules by themselves. Telling consumers what you are about to do to them is not justification for the act itself. Informing consumers about the policies the companies have unilaterally established is not absolution for the practices those rules allow.

Specific disclosure as to what data is being collected, by what means, how the data is used, and to whom it is available are essential to the meaningful enrichment of any transparency. Most important, however, is giving the consumer control over their own information. This means consumers should have up-front opt-in control of what information is collected and how it is used. Consumer control of his or her information should also include the ability to move that information to a different platform or service.

In addition to consumer control and corporate transparency, a “duty of care” begins with protecting personal information as a forethought, not an afterthought. Mark Zuckerberg was candid in his congressional testimony when he said the design of digital platforms often proceeded without consideration of the effect of that design. “We didn’t take a broad enough view of our responsibility,” he told the United States Senate.19

What has been missing thus far in the internet era has been exactly that kind of planning ahead to identify the possible effects of a specific digital activity. Asking the question, “Do we understand the implications on personal privacy of what we are building?” should be a threshold question in the creation of digital services.

Transparency, control, and forethought are implementations of the “duty of care.” It underlies the legal principle of negligence and the expectation of reasonable care being exercised to anticipate and mitigate the potential harm an activity might impose.

The personal information that is collected has also been cartelized to create new market-dominating anti-competitive forces. The data economy is no different from earlier economies where human nature and economic instinct created market-controlling bottlenecks. One of the basic concepts developed in the common law was to open access to bottlenecks through a “duty to deal.”

The data economy is no different from earlier economies where human nature and economic instinct created market-controlling bottlenecks.

Bottlenecks and the attempt to exploit them are as old as time. In Medieval times, for instance, roadside inns and river ferries were examples of such bottlenecks. The common law held, however, that such fundamental activities had the responsibility to accept all comers, not just those the proprietor chose to serve. The internet is the 21st-century river ferry: a fundamental activity upon which depends the economic well-being of others. Similarly, just as the ancient innkeeper controlled access to food that should not be denied others, the digital platform companies control access to the data sustenance of the digital economy.

For networks, the “duty to deal” means a prohibition on discriminatory access. The ferryman’s duty to carry something across the river is no different than the telegraph, railroad, and telephone networks’ duty to carry all comers indiscriminately. It is also the heart of net neutrality.

For platforms such as Google and Facebook, the “duty to deal” means the inability to hoard a fundamental asset to the detriment of society. The Medieval innkeeper was not required to feed travelers for free, but he was required not to withhold the sustenance he had collected and prepared. The innkeepers of the internet era are the platform companies that collect, aggregate, and allocate digital information; like their analog predecessors, they are free to profit from their services, but the services must be openly available.

For 600 years, the simple, yet irrefutable concept that the proprietor of a fundamental asset has a duty to make it available has stood the test of time and technology to remain valid today. While digital technology has redesigned the nature of bottlenecks, nothing has repealed the incentive behind the creation of such bottlenecks, nor the public interest remedy to their abuses.

VI. Old concepts for new times

It is both fascinating and practicable that centuries-old solutions could help us deal with the realities of the digital era. Companies have a responsibility to act to protect the consumer’s best interests—a duty of care—and a responsibility to not act as a marketplace choking bottleneck—a duty to deal. To oversee that, government has a duty to implement rules that turn these responsibilities into required practices for the benefit of the common good.

We should celebrate the many remarkable developments made possible by the companies of the digital economy. At the same time, however, it is time to reassert old truths and re-establish in law and regulation traditional duties to protect citizens and the competitive market. Such rules can ultimately benefit the companies and internet capitalism in the same way that past public policy decisions permitted industrial capitalism to flourish.

If we reassert public interest rules over private interest rules, we will have taken an important and essential step toward the preservation of liberal democratic capitalism.

If we do this—if we reassert public interest rules over private interest rules—we will have not only answered “Who makes the rules in the new Gilded Age?” but we also will have taken an important and essential step toward the preservation of liberal democratic capitalism.

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By Tom Wheeler
Introduction
At a summit of international business leaders recently, I was surprised how often the discussions turned to the impact of the internet on liberal democratic values, including capitalism. Populism, nationalism, protectionism, Brexit, Trump, the rise of the alt-right, the call for socialism, and the seeming success of government-managed markets were all attributed—at least in part—to how the internet has eliminated many of the rules that delivered stability for the last century.
A “liberal democracy” does not apply the word “liberal” as we do in American politics. A liberal democracy is a representative democracy of free and fair elections, and the rule of law applied to equally protect all persons. Until recently, it has been on the rise throughout the world. Democratic capitalism is a free market operating within guardrails established by such a liberal democracy.
What I was hearing from the business leaders was that new technology and the internet create an economic and social instability that plays into the hands of those at the extremes—extremes of both political thought and marketplace dominance.
At the political level, the digital engine that is driving economic and social instability also provides the tools to exploit the resulting dissatisfaction so as to threaten liberal democratic capitalism. Populism from the right can tend toward authoritarianism, while populism from the left can tend toward socialism. In the marketplace, technology has delivered a different type of extremism: a handful of companies with unfettered dominance over key components of economic activity. The internet, a decentralized collection of interconnecting networks, has created new centralized powers that siphon, aggregate, and manipulate personal information to create bottlenecks to the operation of free and open competition.
Populism from the right can tend toward authoritarianism, while populism from the left can tend toward socialism. In the marketplace, technology has delivered a different type of extremism: a handful of companies with unfettered dominance over key components of economic activity.
The internet started out with the hope of being the great democratizer by removing barriers to everything from the flow of news to local taxi service. While the networks of history had centralized economic activity, the distributed architecture of the internet would similarly distribute power away from central institutions. Unfortunately, that has not been the result. Companies utilize the distributed network to recentralize activity. Corporate digital autocrats collect personal information and exploit it to control markets. Political digital autocrats use the internet to spy on their citizens and target attacks on the democratic process.
I. Technology has done this before
That the effects of new technology cause such upheaval should not surprise us. Technological change previously caused similar—if not greater—destabilization; both economic and political. The technology-driven upheavals of the late 19th and early 20th centuries shaped the world from which our new technology is departing. The challenges of that time echo in the reality that confronts us today.
That the effects of new technology cause such upheaval should not surprise us. Technological change previously caused similar—if not greater—destabilization; both economic and political.
A couple of decades after the Civil War, the United States entered an era dubbed “The Gilded Age.” It was Samuel Clemens—Mark Twain—who gave us the term. In an 1873 novel, co-written with his friend Charles Dudley Warner, the duo satirized the economic excesses, personal greed and political corruption of the time. The novel’s title, “The Gilded Age: A Tale of Today,” was an inspired choice of words.
In Twain’s telling, the era ... By Tom Wheeler
Introduction
At a summit of international business leaders recently, I was surprised how often the discussions turned to the impact of the internet on liberal democratic values, including capitalism. Populism, nationalism, ... https://www.brookings.edu/blog/techtank/2018/12/06/can-china-have-difficult-conversations-about-the-internet/Can China have difficult conversations about the internet?http://webfeeds.brookings.edu/~/584005332/0/brookingsrss/topics/balkans~Can-China-have-difficult-conversations-about-the-internet/
Thu, 06 Dec 2018 12:00:30 +0000https://www.brookings.edu/?p=551499

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By Cameron F. Kerry

Attending China’s World Internet Conference—China’s annual showcase for its vision of internet governance—was preceded by the irony of preparing to minimize connection to the internet. I took none of my usual devices. Instead, I rented a smartphone for a week and installed a minimal number of apps, including a virtual private network (VPN) service before leaving. I set up a temporary email account. I took a “thin client” office laptop with a secure VPN connector and nothing on its hard drive.

This congress was China’s fifth World Internet Congress, held each time in the ancient canal town of Wuzhen and centered on promoting China’s vision for a system of internet governance led by government and structured to protect national sovereignty. This is an alternative to the multistakeholder system that evolved in the United States and has grown organically into an international system. China, Russia, and other nations see this as a product of the U.S. and an international system they were not part of. The high-level attention and resources China puts into these congresses reflect a level of commitment to advocating its alternative unmatched by the U.S.

Unlike the previous two years’ conferences, this one did not feature speakers as high-profile as President Xi Jinping or Apple’s Tim Cook. But Xi was much quoted by Chinese officials, and mentions of “collective governance,” “cyber sovereignty,” “mutual respect,” “multilateralism,” and United Nations leadership were frequent. (A presenter from France got into the spirit with a presentation entitled “creating a digital world of mutual trust and collective governance—towards a community with a shared future in cyberspace;” it wasn’t clear how the content related to this topic but the title offered a deep bow to the hosts).

The Brookings delegation was there for a “high-level think tank forum,” a roundtable exchange led on the Chinese side by the Chinese Academy of Cyberspace Studies and Chinese Academy of Social Sciences on the general topic of U.S.-China relations in cyberspace. The discussion was divided into two parts, a general assessment of the state of relations followed by a discussion of issues presented by development of artificial intelligence.

It is fair to say that the first topic did not get much beyond the broader issues of the U.S.-China relationship. The developing trade war provided the backdrop, and the conference took place as Donald Trump was holding his post-election press conference crediting his policies with keeping China from passing America as an economic power. All that feeds Chinese perceptions that the U.S.—under this administration at least—is opposed not simply to Chinese policies, but views the rise of China as an inherent threat. Add to these China’s seemingly reduced commitment to the 2015 Xi-Obama agreement on cyber-espionage for commercial purposes and an indefinite postponement of an ongoing cyber dialogue, and it was hard to find common ground.

The discussion on artificial intelligence struck a different note, though. Despite reports presenting AI development as a new arms race between China and the U.S. (development of some automated weapons systems could become a literal arms race) and China’s targeting of AI development as a strategic centerpiece of its industrial strategy, there was common concern with the social issues of ethics, discrimination, and the future of work arising from AI.

My own comments were aimed at what may be the self-limiting effect of China’s intranet defined by national borders. Network theory measures the value of networks by Metcalfe’s Law, where network value is a function of the square of the number of nodes or points of connection on the network. China has reached 800 million internet users, a number that exceeds the entire populations of the United States, Brazil, and Indonesia combined. With so many points of connection within its borders, China alone can generate significant network effects. But it still represents only 20 percent of the world’s internet users, which means that by itself it can generate only four percent of the effects possible from a global network. China is choosing to cut off part of these effects.

Of course, China is not entirely cut off from the world in a virtual Middle Kingdom. As one Chinese internet investor put it in the recent New York Timesspecial report on China, “We still get the information we need for economic modernization.” But the ability to conduct business is only one among many benefits of being connected.

China’s leaders have managed its rise with extraordinary drive and agility for several decades. To sustain that rise in the decades ahead, they have to move increasingly from Deng Xiaoping’s “crossing the river by feeling the stones” to high wire acts in several directions. Can they successfully root out a system of corruption without alienating the power structures that have benefited? Can they meet the growing energy and other resource demands at the same time as serious environmental and climate goals? Can they turn their enterprises into efficient market actors that remain instruments of state policies? And the trickiest act of them all: can they juggle all these things and keep economic growth going enough to satisfy the rising expectations of the people and maintain their support?

China’s internet model parallels these challenges. In the long term, can China sustain its own carefully controlled network and still reap all the economic and social benefits of global connectedness it needs?

]]>
By Cameron F. Kerry
Attending China’s World Internet Conference—China’s annual showcase for its vision of internet governance—was preceded by the irony of preparing to minimize connection to the internet. I took none of my usual devices. Instead, I rented a smartphone for a week and installed a minimal number of apps, including a virtual private network (VPN) service before leaving. I set up a temporary email account. I took a “thin client” office laptop with a secure VPN connector and nothing on its hard drive.
This congress was China’s fifth World Internet Congress, held each time in the ancient canal town of Wuzhen and centered on promoting China’s vision for a system of internet governance led by government and structured to protect national sovereignty. This is an alternative to the multistakeholder system that evolved in the United States and has grown organically into an international system. China, Russia, and other nations see this as a product of the U.S. and an international system they were not part of. The high-level attention and resources China puts into these congresses reflect a level of commitment to advocating its alternative unmatched by the U.S.
Unlike the previous two years’ conferences, this one did not feature speakers as high-profile as President Xi Jinping or Apple’s Tim Cook. But Xi was much quoted by Chinese officials, and mentions of “collective governance,” “cyber sovereignty,” “mutual respect,” “multilateralism,” and United Nations leadership were frequent. (A presenter from France got into the spirit with a presentation entitled “creating a digital world of mutual trust and collective governance—towards a community with a shared future in cyberspace;” it wasn’t clear how the content related to this topic but the title offered a deep bow to the hosts).
The Brookings delegation was there for a “high-level think tank forum,” a roundtable exchange led on the Chinese side by the Chinese Academy of Cyberspace Studies and Chinese Academy of Social Sciences on the general topic of U.S.-China relations in cyberspace. The discussion was divided into two parts, a general assessment of the state of relations followed by a discussion of issues presented by development of artificial intelligence.
It is fair to say that the first topic did not get much beyond the broader issues of the U.S.-China relationship. The developing trade war provided the backdrop, and the conference took place as Donald Trump was holding his post-election press conference crediting his policies with keeping China from passing America as an economic power. All that feeds Chinese perceptions that the U.S.—under this administration at least—is opposed not simply to Chinese policies, but views the rise of China as an inherent threat. Add to these China’s seemingly reduced commitment to the 2015 Xi-Obama agreement on cyber-espionage for commercial purposes and an indefinite postponement of an ongoing cyber dialogue, and it was hard to find common ground.
The discussion on artificial intelligence struck a different note, though. Despite reports presenting AI development as a new arms race between China and the U.S. (development of some automated weapons systems could become a literal arms race) and China’s targeting of AI development as a strategic centerpiece of its industrial strategy, there was common concern with the social issues of ethics, discrimination, and the future of work arising from AI.
My own comments were aimed at what may be the self-limiting effect of China’s intranet defined by national borders. Network theory measures the value of networks by Metcalfe’s Law, where network value is a function of the square of the number of nodes or points of connection on the network. China has reached 800 million internet ... By Cameron F. Kerry
Attending China’s World Internet Conference—China’s annual showcase for its vision of internet governance—was preceded by the irony of preparing to minimize connection to the internet.https://www.brookings.edu/blog/techtank/2018/11/29/brookings-survey-finds-57-percent-are-positive-about-their-online-shopping-experiences/Brookings survey finds 57 percent are positive about their online shopping experienceshttp://webfeeds.brookings.edu/~/582843254/0/brookingsrss/topics/balkans~Brookings-survey-finds-percent-are-positive-about-their-online-shopping-experiences/
Thu, 29 Nov 2018 12:00:52 +0000https://www.brookings.edu/?p=550222

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By Darrell M. West

Fifty-seven percent of respondents are positive about their online shopping experiences, according to a survey undertaken by researchers at the Brookings Institution. But when asked which provides a better shopping experience, 40 percent cite actual stores, 26 percent say online websites, and 34 percent are unsure.

The survey was an online U.S. national poll undertaken with 2,102 adult internet users between November 12 and 14, 2018. It was overseen by Darrell M. West, vice president of Governance Studies, director of the Center for Technology Innovation at the Brookings Institution, and the author of The Future of Work: Robots, AI, and Automation. Responses were weighted using gender, age, and region to match the demographics of the national internet population as estimated by the U.S. Census Bureau’s Current Population Survey.

Online Shopping

Twenty-three percent say they increased their online shopping over the past year and 15 percent indicate they plan to increase their online shopping in the next year.

There are differences by age and region. Those 35 and older (16 percent) are more likely than those 18 to 34 (12 percent) to say they will increase their online shopping next year. People in the South (21 percent) and Northeast (18 percent) were more likely than in the Midwest (11 percent) to say they plan to do so. There were no gender differences in planned online shopping behavior.

Online shopping recommendations

Some e-commerce sites give personal recommendations of things to buy. When asked if they find these shopping recommendations helpful, 36 percent said they were unhelpful, 24 percent found them helpful and 40 percent were unsure.

Importance of home delivery

Forty-six percent say home delivery is very important to their shopping decisions, 27 percent believe it is somewhat important, 10 percent claim it is not very important, and 17 percent are unsure.

Mixed views about drone delivery

People have mixed views about having online goods delivered to their homes via unmanned autonomous drones. When asked about this, 48 percent are negative, 23 percent are positive, and 29 percent are unsure.

Traffic congestion by delivery trucks

Many do not believe that delivery trucks increase traffic congestion in their community. Forty-six percent say these trucks have not increased congestion, 30 percent say the vehicles have increased congestion somewhat, 9 percent say they have done so a lot, and 15 percent are unsure.

Handling of consumer data

The survey asked how people feel about the way online shopping websites handle consumer data. Forty-three percent are negative, 16 percent are positive, and 41 percent are unsure.

Online information being hacked

Twenty-six percent say they or an immediate family member have had their online shopping or credit card information hacked or stolen in the past year, 52 percent have not, and 22 percent are unsure.

Survey Questions and Answers

1. In the past year, have you decreased, kept the same, or increased your online shopping?

11% decreased

34% kept the same

23% increased

32% don’t know or no answer

2. In the next year, do you plan to decrease, keep the same, or increase your online shopping?

Age:

Survey Methodology

This online survey polled 2,102 adult internet users in the United States November 12 to 14, 2018 through the Google Surveys platform. Responses were weighted using gender, age, and region to match the demographics of the national internet population as estimated by the U.S. Census Bureau’s Current Population Survey.

In the 2012 presidential election, Google Surveys was the second most accurate poll of national surveys as judged by polling expert Nate Silver. In addition, the Pew Research Center undertook a detailed assessment of Google Surveys and found them generally to be representative of the demographic profile of national internet users. In comparing Google Survey results to its own telephone polls on 43 different substantive issues, Pew researchers found a median difference of about three percentage points between Google online surveys and Pew telephone polls. A 2016 analysis of Google Surveys published in the peer-reviewed methodology journal Political Analysis by political scientists at Rice University replicated a number of research results and concluded “GCS [Google Consumer Surveys] is likely to be a useful platform for survey experimentalists.”

This research was made possible by Google Surveys, which donated use of its online survey platform. The questions and findings are solely those of the researchers and not influenced by any donation. For more detailed information on the methodology, see the Google Surveys Whitepaper.

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https://www.brookings.edu/wp-content/uploads/2018/02/2018-02-01_metro_black-employment-1.jpg?w=270By Darrell M. West
Fifty-seven percent of respondents are positive about their online shopping experiences, according to a survey undertaken by researchers at the Brookings Institution. But when asked which provides a better shopping experience, 40 percent cite actual stores, 26 percent say online websites, and 34 percent are unsure.
The survey was an online U.S. national poll undertaken with 2,102 adult internet users between November 12 and 14, 2018. It was overseen by Darrell M. West, vice president of Governance Studies, director of the Center for Technology Innovation at the Brookings Institution, and the author of The Future of Work: Robots, AI, and Automation. Responses were weighted using gender, age, and region to match the demographics of the national internet population as estimated by the U.S. Census Bureau’s Current Population Survey.
Online Shopping
Twenty-three percent say they increased their online shopping over the past year and 15 percent indicate they plan to increase their online shopping in the next year.
There are differences by age and region. Those 35 and older (16 percent) are more likely than those 18 to 34 (12 percent) to say they will increase their online shopping next year. People in the South (21 percent) and Northeast (18 percent) were more likely than in the Midwest (11 percent) to say they plan to do so. There were no gender differences in planned online shopping behavior.
Online shopping recommendations
Some e-commerce sites give personal recommendations of things to buy. When asked if they find these shopping recommendations helpful, 36 percent said they were unhelpful, 24 percent found them helpful and 40 percent were unsure.
Importance of home delivery
Forty-six percent say home delivery is very important to their shopping decisions, 27 percent believe it is somewhat important, 10 percent claim it is not very important, and 17 percent are unsure.
Mixed views about drone delivery
People have mixed views about having online goods delivered to their homes via unmanned autonomous drones. When asked about this, 48 percent are negative, 23 percent are positive, and 29 percent are unsure.
Traffic congestion by delivery trucks
Many do not believe that delivery trucks increase traffic congestion in their community. Forty-six percent say these trucks have not increased congestion, 30 percent say the vehicles have increased congestion somewhat, 9 percent say they have done so a lot, and 15 percent are unsure.
Handling of consumer data
The survey asked how people feel about the way online shopping websites handle consumer data. Forty-three percent are negative, 16 percent are positive, and 41 percent are unsure.
Online information being hacked
Twenty-six percent say they or an immediate family member have had their online shopping or credit card information hacked or stolen in the past year, 52 percent have not, and 22 percent are unsure.
Survey Questions and Answers
1. In the past year, have you decreased, kept the same, or increased your online shopping?
- 11% decreased - 34% kept the same - 23% increased - 32% don’t know or no answer
2. In the next year, do you plan to decrease, keep the same, or increase your online shopping?
- 8% decrease - 49% keep the same - 15% increase - 28% don’t know or no answer
3. Overall, how would you rate your recent online shopping experiences?
- 8% very negative - 5% somewhat negative - 34% somewhat positive - 23% very positive - 30% don’t know or no answer
4. In general, which do you think provides a better shopping experience?
- 40% actual stores - 26% online websites - 34% don’t know or no answer
5. Some e-commerce sites give you personal recommendations of things to buy. How helpful do you find these shopping recommendations?
- 17% very unhelpful - 19% somewhat unhelpful - 16% somewhat helpful - 8% very helpful - 40% don’t know or no answer ... By Darrell M. West
Fifty-seven percent of respondents are positive about their online shopping experiences, according to a survey undertaken by researchers at the Brookings Institution. But when asked which provides a better shopping experience, 40 ... https://www.brookings.edu/blog/techtank/2018/11/28/the-federal-trade-commission-will-safeguard-privacy-in-name-only/The Federal Trade Commission will safeguard privacy in name onlyhttp://webfeeds.brookings.edu/~/582634056/0/brookingsrss/topics/balkans~The-Federal-Trade-Commission-will-safeguard-privacy-in-name-only/
Wed, 28 Nov 2018 12:00:12 +0000https://www.brookings.edu/?p=549999

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By Tom Wheeler

If the American people and Congress are looking to the Federal Trade Commission (FTC) for leadership in the protection of personal privacy, they should prepare for disappointment. In a recent filing with the Commerce Department’s National Telecommunications and Information Administration, the FTC walked away from giving consumers meaningful control of their private information. The bromides they espoused sound remarkably similar to the arguments of the companies that routinely exploit our privacy.

In the section of the filing that focuses on consumer control of their private information, the FTC followed the typical Trump Administration tactic of sounding like it stands for something before ultimately standing down. “Giving consumers the ability to exercise meaningful control over the collection and use of data about them is beneficial,” the filing states before ending the sentence with the gutting qualifier, “in some cases.” The agency that so many in Congress look to as the institution to protect consumer privacy then warned, “certain controls can be costly to implement and may have unintended consequences.”

This waffling was just the warm-up to the following exercise in political spin: “if consumers were opted out of online advertisements by default (with the choice of opting in), the likely result would include the loss of advertising-funded online content.” What an amazing transmogrification of “opt-in” privacy protections to become an “opt-out” of advertising! The fundamental concept that the consumer should have the right to opt-in control of information collected about them magically transformed into opting out of advertisements.

The FTC is wrong because when a consumer chooses what information to provide, it does not mean they are choosing to opt out of advertising. It only means that each consumer is exercising their individual agency to decide what information is collected about them for the targeting of advertisements.

The FTC is further wrong because a consumer making a choice about what information to disclose does not mean there will not be information for the platform companies to use. It only means that the consumer has asserted ownership over his or her digital information. The platform companies will still have ample information to use to sell targeted advertising and messaging.

Ninety-two percent of Americans believe companies should have to get permission before sharing their online data. Limiting consumers to opting out only after the data collection has begun—as the FTC advocates—merely shifts the burden to the consumer to attempt to recover their privacy. Looking at existing opt-out policies discloses they typically exist in name only—for instance, to opt out successfully, the consumer has to contact each of the companies to whom the collecting company makes their private information available.

The arguments of the FTC suspiciously echo the advocacy of the companies that today have virtually unimpeded access to all our personal information. After the Obama Federal Communications Commission adopted opt-in privacy rules for network providers (that paralleled the rules that existed for telephone companies), a coalition of networks and the platform service companies that use the networks successfully urged the Republican-led Congress to repeal the Open Internet Order. They argued in a letter to Congress that such rules would, “interfere with the ability of consumers to receive customized services and capabilities.”

It sounds like the FTC just parroted the industry’s argument that somehow protecting a consumer’s privacy means interfering with their access to online products. Sure, the online companies base the advertisement placements they sell on the information they have on each of us. But an opt-in choice for consumers does not mean there will be no information; it simply means that the consumer will determine what that information will be.

The Trump Administration is pretending to be concerned about personal privacy by using the time-honored delaying technique of ordering a study. It’s not as if the evidence doesn’t already abound. Every day, we see another example of privacy invasion from those whose business model depends on siphoning our personal information to resell it for targeted advertising and other messages.

Facebook gave access to the personal data of 87 million Americans (without their knowledge) to Cambridge Analytica. Those Americans did not benefit from the “customized services” the industry and FTC like to talk about. Denied any opt-in authority as to what information could be collected and who could use it, these Americans were exploited for the benefit of Facebook’s revenue, Cambridge Analytica’s manipulation, and the Russian government’s propaganda.

It is concerning that the FTC—the agency so many have looked to as a potential protector of online privacy—has shown that when given a choice between protecting companies or protecting consumers, they accept the companies’ spin and walk away from Americans’ concerns about their personal privacy.

Facebook is a donor to the Brookings Institution. The findings, interpretations, and conclusions posted in this piece are solely those of the author and not influenced by any donation.

]]>
By Tom Wheeler
If the American people and Congress are looking to the Federal Trade Commission (FTC) for leadership in the protection of personal privacy, they should prepare for disappointment. In a recent filing with the Commerce Department’s National Telecommunications and Information Administration, the FTC walked away from giving consumers meaningful control of their private information. The bromides they espoused sound remarkably similar to the arguments of the companies that routinely exploit our privacy.
In the section of the filing that focuses on consumer control of their private information, the FTC followed the typical Trump Administration tactic of sounding like it stands for something before ultimately standing down. “Giving consumers the ability to exercise meaningful control over the collection and use of data about them is beneficial,” the filing states before ending the sentence with the gutting qualifier, “in some cases.” The agency that so many in Congress look to as the institution to protect consumer privacy then warned, “certain controls can be costly to implement and may have unintended consequences.”
This waffling was just the warm-up to the following exercise in political spin: “if consumers were opted out of online advertisements by default (with the choice of opting in), the likely result would include the loss of advertising-funded online content.” What an amazing transmogrification of “opt-in” privacy protections to become an “opt-out” of advertising! The fundamental concept that the consumer should have the right to opt-in control of information collected about them magically transformed into opting out of advertisements.
The FTC is wrong because when a consumer chooses what information to provide, it does not mean they are choosing to opt out of advertising. It only means that each consumer is exercising their individual agency to decide what information is collected about them for the targeting of advertisements.
The FTC is further wrong because a consumer making a choice about what information to disclose does not mean there will not be information for the platform companies to use. It only means that the consumer has asserted ownership over his or her digital information. The platform companies will still have ample information to use to sell targeted advertising and messaging.
Ninety-two percent of Americans believe companies should have to get permission before sharing their online data. Limiting consumers to opting out only after the data collection has begun—as the FTC advocates—merely shifts the burden to the consumer to attempt to recover their privacy. Looking at existing opt-out policies discloses they typically exist in name only—for instance, to opt out successfully, the consumer has to contact each of the companies to whom the collecting company makes their private information available.
The arguments of the FTC suspiciously echo the advocacy of the companies that today have virtually unimpeded access to all our personal information. After the Obama Federal Communications Commission adopted opt-in privacy rules for network providers (that paralleled the rules that existed for telephone companies), a coalition of networks and the platform service companies that use the networks successfully urged the Republican-led Congress to repeal the Open Internet Order. They argued in a letter to Congress that such rules would, “interfere with the ability of consumers to receive customized services and capabilities.”
It sounds like the FTC just parroted the industry’s argument that somehow protecting a consumer’s privacy means interfering with their access to online products. Sure, the online companies base the advertisement placements they sell on the information they have on each of us. But an opt-in choice for consumers does not mean there will ... By Tom Wheeler
If the American people and Congress are looking to the Federal Trade Commission (FTC) for leadership in the protection of personal privacy, they should prepare for disappointment. In a recent filing with the Commerce Department’https://www.brookings.edu/blog/techtank/2018/11/09/the-supreme-court-and-house-democrats-breathe-new-life-into-net-neutrality/The Supreme Court and House Democrats breathe new life into net neutralityhttp://webfeeds.brookings.edu/~/579324588/0/brookingsrss/topics/balkans~The-Supreme-Court-and-House-Democrats-breathe-new-life-into-net-neutrality/
Fri, 09 Nov 2018 15:50:40 +0000https://www.brookings.edu/?p=547340

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By Tom Wheeler

The activities of the past week have reshaped the future of net neutrality and the strategy for protecting that future.

On November 5, the Supreme Court declined to review the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule. The industry groups that had long opposed non-discriminatory access to broadband networks had previously stopped such regulation at the D.C. Circuit. When they attempted the same thing with regard to the 2015 decision of the Federal Communications Commission (FCC), a three-judge panel ruled the FCC’s favor. The industry then appealed the panel’s decision to the entire D.C. Circuit and lost again. The industry then appealed that loss to the Supreme Court. The Supreme Court voted 4-3 (with Chief Justice Roberts and Justice Kavanaugh abstaining) to deny a writ of certiorari for the appeal. As a result, the lower court’s decision upholding the 2015 Open Internet Rule stands.

The FCC’s 2015 Open Internet decision declared broadband providers to be Telecommunications Services subject to the common carrier requirements of Title II of the Communications Act. Just like the telegraph and telephone companies that preceded them, internet service providers could not discriminate among those using the network. They could not, for instance, break the internet into fast lanes and slow lanes depending on how much a content provider such as Netflix paid them.

In 2017, the Trump FCC repealed the Open Internet Rule at the request of the network companies. In the process, the FCC also ruled that the agency had only minimal authority over internet networks. Except for toothless transparency requirements, the Commission would exercise no oversight over broadband internet access services. Not only did the agency created by Congress to oversee the nation’s networks walk away from that responsibility, but it also joined with the plaintiffs in asking the Supreme Court to overrule the D.C. Circuit’s 2015 decision. When the High Court denied that request, it breathed new life into the 2015 Open Internet Rule.

Democrats take the House

The second development within the past week was the Democrats taking control of the House of Representatives. House Democratic leaders from presumptive Speaker Nancy Pelosi (D-CA,) to the new Chairman of the Energy and Commerce Committee Frank Pallone (D-NJ), to the new Chairman of the Telecommunications Subcommittee Mike Doyle (D-PA) have all been vocal supporters of strong net neutrality rules. Reps. Pallone and Doyle introduced a resolution to repeal the Trump FCC abdication but the Republican majority in the House refused to move it to a vote. In the Senate, Sen. Ed Markey (D-MA) was able to use the different Senate rules to force a vote that passed 52-47).

Previously, the House gave cover for the Trump FCC on this and many other important topics. Now, with control of the gavel, Reps. Pallone and Doyle will be able to conduct oversight hearings into the activities of the Trump FCC. In addition, the committees will be able to hold hearings on the effect of eliminating the Open Internet Rule and to hear voices and facts the Trump FCC has silenced.

The probability of meaningful net neutrality legislation remains a long shot, however. Even if it was passed by the House, the Republican-controlled Senate would not likely support it. Even if they miraculously passed a bill, President Trump would no doubt veto it, having previously spoken out against net neutrality. The only foreseeable legislative path would be with the support of the network companies, and that support would come at the price of watering down the proposal to render it virtually meaningless. With the Supreme Court’s refusal to overturn the 2015 Open Internet Rule, strong rules remain a possibility even without legislation.

Future action

On February 1, 2019 the D.C. Circuit will hear oral arguments on the lawsuit challenging the Trump FCC’s elimination of the Open Internet Rule. Here is where things start to get interesting in light of the recent Supreme Court decision. If the D.C. Circuit rules against the FCC and vacates the 2017 elimination of the rules, then the 2015 Open Internet Rule is reinstated—and the Supreme Court has declined to consider the matter for now.

In their zeal to gut oversight of their activities, the internet networks and their Trump FCC allies may have shot themselves in the foot. There is a strong case that the Trump FCC acted in an arbitrary and capricious manner when it repealed the 2015 Open Internet Rule and walked away from any responsibility over the most important network of the 21st century. If the D.C. Circuit makes such a finding, net neutrality would once again be the law of the land. Although the Trump FCC would probably spitefully ignore its enforcement and even force adoption of a new rule to free the broadband companies, that action would simply bolster the Democrats in the House.

In the meantime, the House Democrats can hold a series of hearings to bring forth into the public record the information the Trump FCC and the Republican-led Congress has chosen to ignore. Any push for meaningful legislation will probably meet the opposition of the companies and their Republican allies, but the recent Supreme Court decision and a Democratic House-led push for truth will keep net neutrality alive.

]]>
By Tom Wheeler
The activities of the past week have reshaped the future of net neutrality and the strategy for protecting that future.
On November 5, the Supreme Court declined to review the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule. The industry groups that had long opposed non-discriminatory access to broadband networks had previously stopped such regulation at the D.C. Circuit. When they attempted the same thing with regard to the 2015 decision of the Federal Communications Commission (FCC), a three-judge panel ruled the FCC’s favor. The industry then appealed the panel’s decision to the entire D.C. Circuit and lost again. The industry then appealed that loss to the Supreme Court. The Supreme Court voted 4-3 (with Chief Justice Roberts and Justice Kavanaugh abstaining) to deny a writ of certiorari for the appeal. As a result, the lower court’s decision upholding the 2015 Open Internet Rule stands.
The FCC’s 2015 Open Internet decision declared broadband providers to be Telecommunications Services subject to the common carrier requirements of Title II of the Communications Act. Just like the telegraph and telephone companies that preceded them, internet service providers could not discriminate among those using the network. They could not, for instance, break the internet into fast lanes and slow lanes depending on how much a content provider such as Netflix paid them.
In 2017, the Trump FCC repealed the Open Internet Rule at the request of the network companies. In the process, the FCC also ruled that the agency had only minimal authority over internet networks. Except for toothless transparency requirements, the Commission would exercise no oversight over broadband internet access services. Not only did the agency created by Congress to oversee the nation’s networks walk away from that responsibility, but it also joined with the plaintiffs in asking the Supreme Court to overrule the D.C. Circuit’s 2015 decision. When the High Court denied that request, it breathed new life into the 2015 Open Internet Rule.
Democrats take the House
The second development within the past week was the Democrats taking control of the House of Representatives. House Democratic leaders from presumptive Speaker Nancy Pelosi (D-CA,) to the new Chairman of the Energy and Commerce Committee Frank Pallone (D-NJ), to the new Chairman of the Telecommunications Subcommittee Mike Doyle (D-PA) have all been vocal supporters of strong net neutrality rules. Reps. Pallone and Doyle introduced a resolution to repeal the Trump FCC abdication but the Republican majority in the House refused to move it to a vote. In the Senate, Sen. Ed Markey (D-MA) was able to use the different Senate rules to force a vote that passed 52-47).
Previously, the House gave cover for the Trump FCC on this and many other important topics. Now, with control of the gavel, Reps. Pallone and Doyle will be able to conduct oversight hearings into the activities of the Trump FCC. In addition, the committees will be able to hold hearings on the effect of eliminating the Open Internet Rule and to hear voices and facts the Trump FCC has silenced.
The probability of meaningful net neutrality legislation remains a long shot, however. Even if it was passed by the House, the Republican-controlled Senate would not likely support it. Even if they miraculously passed a bill, President Trump would no doubt veto it, having previously spoken out against net neutrality. The only foreseeable legislative path would be with the support of the network companies, and that support would come at the price of watering down the proposal to render it virtually meaningless. With the Supreme Court’s refusal to overturn the 2015 Open Internet Rule, strong rules remain a possibility even without legislation.
Future action
On February 1, 2019 the D.C. Circuit will hear oral arguments on the lawsuit ... By Tom Wheeler
The activities of the past week have reshaped the future of net neutrality and the strategy for protecting that future.
On November 5, the Supreme Court declined to review the decision of the D.C. Circuit Court that twice upheld the ... https://www.brookings.edu/blog/techtank/2018/10/10/the-future-of-cryptocurrency-regulation/The future of cryptocurrency regulationhttp://webfeeds.brookings.edu/~/573934788/0/brookingsrss/topics/balkans~The-future-of-cryptocurrency-regulation/
Wed, 10 Oct 2018 11:00:21 +0000https://www.brookings.edu/?p=540103

Much like initial public offerings (IPOs), ICOs are designed to raise money from investors. Unlike IPOs, however, investors do not receive company stock. Rather contributors receive company tokens that can be traded on crypto exchanges. As the range of ICOs has broadened and deepened, many new and established companies have begun exploring ICOs as an alternative form of venture capital. Last fall, for example, the decentralized cloud storage network, Filecoin, raised $257 million. While in March, the messaging app Telegram raised $1.7 billion.

The capacity to tap a liquid market without the need for intermediaries has provided a wide range of companies with deep pools of investor capital. But where stocks are regulated by the Securities and Exchange Commission (SEC), and commodities by the Commodity Futures Trading Commission (CFTC), cryptocurrencies lack an effective regulatory body. In fact, a recent study suggests that the vast majority of ICOs are scams.

Regulating ICOs

So where is this all going? With the meteoric rise of ICOs, the SEC has signaled its concern with the potential for fraud. This stands to reason given the enormous growth of ICOs over the past two years. Most government regulators are apprehensive about how to precisely classify ICOs and therefore how to govern and tax them. The most pressing concern for the majority of regulators is eliminating the use of ICOs for money-laundering and terrorism. While critics debate the legitimacy of these concerns, governments are nonetheless struggling to author guidelines for regulating the space.

According to some, cryptocurrencies represent an entirely new asset class. This may not be true of tokens that function like securities, but it may well be true of so-called utility tokens. Broadly speaking, utility tokens are defined as having some utility apart from or in addition to their value as an investment. Ethereum’s Ether (ETH) token, for example, is generally classified as a utility token precisely because it serves as “fuel” for developers executing software on the Ethereum platform.

The problem with strictly classifying all tokens as securities is that they can simultaneously function across multiple categories—as currencies, as instruments for betting (or for voting), and as traditional securities. Indeed, while some regulatory agencies define cryptocurrencies as monetary equivalents, others define them as commodities, or even taxable property. There is, in fact, a global legal vacuum with regard to cryptocurrencies because they do not precisely fit the traditional definition of an investment contract as defined by the Howey test. Under the Howey test, an investment contract is “a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

On the enforcement side, there are an increasing number of class-action lawsuits raised against companies involved in ICOs. Tezos, for example, raised $232 million last year only to face allegations of securities law violations and investor fraud. Selling unregistered securities can mean significant fines and even prison sentences, leading many companies to bypass the U.S. market altogether.

One particular fear is that overregulation will undermine innovation by discouraging risk-taking. The value of ICOs is that they have radically democratized access to capital for start-ups. This suggests the need for a different set of regulatory obligations specifically designed to allow smaller, cash-poor companies to raise funds from a wide range of funders. Unlike crowdfunding, for example, ICO contributors can trade their assets on secondary markets in order to potentially strengthen their investments.

What is clear is that confusion around ICOs has been made more complicated by the fact that various governments around the world hold widely divergent views on regulation. As it stands, there are roughly three broad types of regulatory systems overseeing ICOs. These are closed (China), open and strict (USA), and open and liberal (Switzerland). Nonetheless, the priority for most governments is combatting fraud, while at the same time enabling legitimate businesses to flourish. Gibraltar, for example, offers licenses to some crypto-companies, while France is working on a system of voluntary licensing.

The Future of ICO Regulation

Despite attempts at regulation offered by governments around the world, the rise of cryptocurrencies remains a challenge. The U.S. approach to regulating the industry has been to work within its current laws rather than introduce new ones. This has been arguably shortsighted. The vacuum in effective regulation has ensured that market manipulation remains a wide-scale problem. Without some degree of protection for investors, for example, this has meant that institutional investors remain on the sidelines, significantly limiting the size of the market.

Going forward, many entrepreneurs remain afraid of punishment by the SEC for lack of guidance. Meanwhile, regulatory uncertainly has limited the kinds of investors pursuing cryptocurrencies. This may be changing but it will require creative solutions to better govern the market in order to:

In the near future, we can be sure that ICOs and the cryptocurrency market as a whole will be increasingly subject to regulation. This is a very good thing. A cryptocurrency market that is effectively regulated will mean a decrease in the herd-driven volatility exciting the market—even as the value of cryptocurrencies continues to rise.

]]>
By Daniel Araya
History may not repeat itself but it certainly does rhyme. During the dot-com bubble, Federal Reserve Chairman Alan Greenspan famously observed that investors were the victims of “irrational exuberance.” This is clearly the case with cryptocurrencies today. Market valuations of cryptocurrencies remain wildly erratic. The price of bitcoin, for example, recently climbed to almost $20,000 only to precipitously fall to less than $7,000. Five years since the very first initial coin offering (ICO), ICOs have raised close to $6 billion. In fact, the total market capitalization of crypto assets now stands at $260 billion.
Much like initial public offerings (IPOs), ICOs are designed to raise money from investors. Unlike IPOs, however, investors do not receive company stock. Rather contributors receive company tokens that can be traded on crypto exchanges. As the range of ICOs has broadened and deepened, many new and established companies have begun exploring ICOs as an alternative form of venture capital. Last fall, for example, the decentralized cloud storage network, Filecoin, raised $257 million. While in March, the messaging app Telegram raised $1.7 billion.
The capacity to tap a liquid market without the need for intermediaries has provided a wide range of companies with deep pools of investor capital. But where stocks are regulated by the Securities and Exchange Commission (SEC), and commodities by the Commodity Futures Trading Commission (CFTC), cryptocurrencies lack an effective regulatory body. In fact, a recent study suggests that the vast majority of ICOs are scams.
Regulating ICOs
So where is this all going? With the meteoric rise of ICOs, the SEC has signaled its concern with the potential for fraud. This stands to reason given the enormous growth of ICOs over the past two years. Most government regulators are apprehensive about how to precisely classify ICOs and therefore how to govern and tax them. The most pressing concern for the majority of regulators is eliminating the use of ICOs for money-laundering and terrorism. While critics debate the legitimacy of these concerns, governments are nonetheless struggling to author guidelines for regulating the space.
According to some, cryptocurrencies represent an entirely new asset class. This may not be true of tokens that function like securities, but it may well be true of so-called utility tokens. Broadly speaking, utility tokens are defined as having some utility apart from or in addition to their value as an investment. Ethereum’s Ether (ETH) token, for example, is generally classified as a utility token precisely because it serves as “fuel” for developers executing software on the Ethereum platform.
The problem with strictly classifying all tokens as securities is that they can simultaneously function across multiple categories—as currencies, as instruments for betting (or for voting), and as traditional securities. Indeed, while some regulatory agencies define cryptocurrencies as monetary equivalents, others define them as commodities, or even taxable property. There is, in fact, a global legal vacuum with regard to cryptocurrencies because they do not precisely fit the traditional definition of an investment contract as defined by the Howey test. Under the Howey test, an investment contract is “a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”
Diverging Regulation
While a legal framework for the overseeing of ICOs is slowly starting to take shape, the fact remains that most governments are not entirely sure how to govern the space. Forecasting future SEC guidance in the United States is difficult, but the common view is that this new asset class will be increasingly subject to U.S. securities laws. A sporadically aggressive posture by ... By Daniel Araya
History may not repeat itself but it certainly does rhyme. During the dot-com bubble, Federal Reserve Chairman Alan Greenspan famously observed that investors were the victims of “irrational exuberance.https://www.brookings.edu/podcast-episode/whos-left-out-by-americas-digital-divide/Who’s left out by America’s digital divide?http://webfeeds.brookings.edu/~/572999554/0/brookingsrss/topics/balkans~Who%e2%80%99s-left-out-by-America%e2%80%99s-digital-divide/
Fri, 05 Oct 2018 15:14:25 +0000https://www.brookings.edu/?post_type=podcast-episode&p=540647

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By Nicol Turner-Lee, Fred Dews

Nicol Turner Lee, a fellow in Governance Studies and the Center for Technology Innovation, discusses America’s digital divide and challenges for people with lower incomes to access high-speed broadband and data networks. Turner Lee also describes the research she is conducting for an upcoming book and a photo story she published on the digital and economic divides in Staunton, Virginia.

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By Nicol Turner-Lee, Fred Dews
Nicol Turner Lee, a fellow in Governance Studies and the Center for Technology Innovation, discusses America’s digital divide and challenges for people with lower incomes to access high-speed broadband and data networks. Turner Lee also describes the research she is conducting for an upcoming book and a photo story she published on the digital and economic divides in Staunton, Virginia.
Also in this episode, Tarun Chhabra and Thomas Wright discuss Wright's book All Measures Short of War” and the future of conflict between competing global powers.
Related content:
Closing the digital and economic divides in rural America
Will the US be 5G ready?
The future of 5G: A fireside chat with FCC Commissioner Brendan Carr
All Measures Short of War
—
Thanks to audio producer Gaston Reboredo with assistance from Mark Hoelscher, and to producers Brennan Hoban and Chris McKenna. Additional support comes from Jessica Pavone, Eric Abalahin, Camilo Ramirez, Emily Horne, and our interns Tim Madden and Churon Bernier.
Subscribe to Brookings podcasts here or on Apple Podcasts, send feedback email to BCP@Brookings.edu, and follow us and tweet us at @policypodcasts on Twitter.
The Brookings Cafeteria is a part of the Brookings Podcast Network. By Nicol Turner-Lee, Fred Dews
Nicol Turner Lee, a fellow in Governance Studies and the Center for Technology Innovation, discusses America’s digital divide and challenges for people with lower incomes to access high-speed broadband and data ... https://www.brookings.edu/events/governing-the-emerging-digital-economy/Governing the emerging digital economyhttp://webfeeds.brookings.edu/~/572455978/0/brookingsrss/topics/balkans~Governing-the-emerging-digital-economy/
Tue, 02 Oct 2018 13:00:28 +0000https://www.brookings.edu/?post_type=event&p=539976

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Consumer data privacy, digital commerce, expansion of broadband networks, and many other advancements within the digital economy are becoming increasingly relevant to policymakers. These areas are being debated as the digital economy—which now accounts for 6.5 percent of the U.S. economy, or $1.2 trillion—continues to generate new opportunities for businesses, government and individuals.

On Friday, Oct. 12, the Center for Technology Innovation at Brookings hosted a fireside chat with David Redl, assistant secretary for communications and information at the Department of Commerce. He also serves as the administrator of the National Telecommunications and Information Administration (NTIA), the executive branch agency that is principally responsible for advising the president on telecommunications and information policy. During the discussion, Redl shared how the agency is addressing consumer data privacy through its recent Request for Comments, which is intended to bring some clarity to the agency’s approach to rules that benefit individuals, while giving organizations legal clarity and the flexibility to innovate.

After the session, panelists took questions from the audience.

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Washington, DCpast15393546001539359100America/New_YorkConsumer data privacy, digital commerce, expansion of broadband networks, and many other advancements within the digital economy are becoming increasingly relevant to policymakers. These areas are being debated as the digital economy—which now accounts for 6.5 percent of the U.S. economy, or $1.2 trillion—continues to generate new opportunities for businesses, government and individuals.
On Friday, Oct. 12, the Center for Technology Innovation at Brookings hosted a fireside chat with David Redl, assistant secretary for communications and information at the Department of Commerce. He also serves as the administrator of the National Telecommunications and Information Administration (NTIA), the executive branch agency that is principally responsible for advising the president on telecommunications and information policy. During the discussion, Redl shared how the agency is addressing consumer data privacy through its recent Request for Comments, which is intended to bring some clarity to the agency’s approach to rules that benefit individuals, while giving organizations legal clarity and the flexibility to innovate.
After the session, panelists took questions from the audience. Consumer data privacy, digital commerce, expansion of broadband networks, and many other advancements within the digital economy are becoming increasingly relevant to policymakers. These areas are being debated as the digital economy—https://www.brookings.edu/blog/techtank/2018/10/01/can-social-media-help-build-communities/Can social media help build communities?http://webfeeds.brookings.edu/~/572283818/0/brookingsrss/topics/balkans~Can-social-media-help-build-communities/
Mon, 01 Oct 2018 15:11:39 +0000https://www.brookings.edu/?p=539858

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By Nicol Turner-Lee, Eric Forbush

Political polarization has been on the rise since the mid-1990s as Republican and Democratic parties drift further apart ideologically. While Americans may believe themselves to be more ideologically polarized than they actually are, there is increased animosity between Democrats and Republicans. In a new paper, co-authors Nicol Turner Lee of Brookings and Eric Forbush, a doctoral student at the University of Pennsylvania’s Annenberg School for Communications, explore the extent to which community-building is possible on social media platforms, particularly on issues where partisanship has forced many Americans to choose sides on politically charged issues.

This paper, presented at the 2018 TPRC conference in Washington, DC, focuses on the demonstrated trends of partisanship in the net neutrality debate, a regulatory framework that prohibits blocking and unreasonable discrimination by Internet Service Providers (ISPs) and promotes greater consumer transparency. The current Federal Communications Commission (FCC) repeal of net neutrality rules led to the national Day of Action to Save Net Neutrality on July 12, 2017, one of the largest online campaigns organized around this issue.

This paper analyzes 81,316 tweets circulated on the first few weeks following the national Day of Action to test whether social media platforms like Twitter can mitigate the often heated offline tensions surrounding politically charged issues. The paper also draws upon theories in the fields of social psychology, political science, and network science to investigate and explore these trends. Our specific inquiry is about the ability of these platforms to present brokers who can help online users work through their differences and possibly toward a compromise on certain issues.

The evidence of our data analysis concluded that social media platforms, in their current state, may find it difficult to create more productive diverse communities because their algorithms reinforce the formation of existing social structures, resulting in online “echo chambers.” We further found that this will not change unless the technical architecture driving these platforms makes room for less concentrated online communities that maintain the dominance of like-minded associations.

In the case of net neutrality, highly ideological senators, including Kamala Harris and Al Franken, were influencers driving the opposition to the FCC’s repeal, alongside organizations with strong political leanings, including Free Press and Fight for the Future. Unfortunately, the absence of social media brokers, who could potentially mediate the friction between groups, resulted in even more deeply polarized communities and opinions on this issue.

Our research also found a relationship between the technical architecture of social media platforms and their contribution to these glaring divisions. In this case, certain algorithms may give dominance to sort, classify and rank information, thus contributing to the rationalization or strengthening of certain online relationships. In our opinion, technical strategies that introduce more online brokers, such as prioritizing their posts in newsfeeds or in friendship and follower suggestions, may lead to more productive debates.

]]>
By Nicol Turner-Lee, Eric Forbush
Political polarization has been on the rise since the mid-1990s as Republican and Democratic parties drift further apart ideologically. While Americans may believe themselves to be more ideologically polarized than they actually are, there is increased animosity between Democrats and Republicans. In a new paper, co-authors Nicol Turner Lee of Brookings and Eric Forbush, a doctoral student at the University of Pennsylvania’s Annenberg School for Communications, explore the extent to which community-building is possible on social media platforms, particularly on issues where partisanship has forced many Americans to choose sides on politically charged issues.
This paper, presented at the 2018 TPRC conference in Washington, DC, focuses on the demonstrated trends of partisanship in the net neutrality debate, a regulatory framework that prohibits blocking and unreasonable discrimination by Internet Service Providers (ISPs) and promotes greater consumer transparency. The current Federal Communications Commission (FCC) repeal of net neutrality rules led to the national Day of Action to Save Net Neutrality on July 12, 2017, one of the largest online campaigns organized around this issue.
This paper analyzes 81,316 tweets circulated on the first few weeks following the national Day of Action to test whether social media platforms like Twitter can mitigate the often heated offline tensions surrounding politically charged issues. The paper also draws upon theories in the fields of social psychology, political science, and network science to investigate and explore these trends. Our specific inquiry is about the ability of these platforms to present brokers who can help online users work through their differences and possibly toward a compromise on certain issues.
The evidence of our data analysis concluded that social media platforms, in their current state, may find it difficult to create more productive diverse communities because their algorithms reinforce the formation of existing social structures, resulting in online “echo chambers.” We further found that this will not change unless the technical architecture driving these platforms makes room for less concentrated online communities that maintain the dominance of like-minded associations.
In the case of net neutrality, highly ideological senators, including Kamala Harris and Al Franken, were influencers driving the opposition to the FCC’s repeal, alongside organizations with strong political leanings, including Free Press and Fight for the Future. Unfortunately, the absence of social media brokers, who could potentially mediate the friction between groups, resulted in even more deeply polarized communities and opinions on this issue.
Our research also found a relationship between the technical architecture of social media platforms and their contribution to these glaring divisions. In this case, certain algorithms may give dominance to sort, classify and rank information, thus contributing to the rationalization or strengthening of certain online relationships. In our opinion, technical strategies that introduce more online brokers, such as prioritizing their posts in newsfeeds or in friendship and follower suggestions, may lead to more productive debates.By Nicol Turner-Lee, Eric Forbush
Political polarization has been on the rise since the mid-1990s as Republican and Democratic parties drift further apart ideologically. While Americans may believe themselves to be more ideologically polarized than ...